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B2B MARKETPLACES AND E-PROCUREMENT. Y. NARAHARI Computer Science and Automation Indian Institute of Science Bangalore - 560 012 [email protected] http://www.csa.iisc.ernet.in. OBJECTIVES OF THE TALK.

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b2b marketplaces and e procurement
Y Narahari, Computer Science and Automation, Indian Institute of ScienceB2B MARKETPLACES AND E-PROCUREMENT

Y. NARAHARI

Computer Science and Automation

Indian Institute of Science

Bangalore - 560 012

[email protected]

http://www.csa.iisc.ernet.in

objectives of the talk
Y Narahari, Computer Science and Automation, Indian Institute of ScienceOBJECTIVES OF THE TALK
  • To bring out and understand the "important" role of electronic marketplaces in supply chain management
  • To understand "critical" design and implementation issues of E-marketplaces
  • To understand the issues in E-procurement
outline of the talk
Y Narahari, Computer Science and Automation, Indian Institute of ScienceOUTLINE OF THE TALK
  • Introduction
  • How do they add value?
  • Design Issues
  • E-Procurement
electronic markets
Y Narahari, Computer Science and Automation, Indian Institute of ScienceELECTRONIC MARKETS
  • E-marketplaces are emerging to serve each point of every industry's supply chain
  • E-markets are highly collaborative E-Business models that organize complex business processes between multiple participants into a virtual commerce community
e marketplaces value creation
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-MARKETPLACES :VALUE CREATION
  • efficient transactional processes
  • new business relationships
  • new business models
  • new businesses
e marketplaces categories
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-MARKETPLACES: CATEGORIES
  • Horizontal
  • Vertical
  • Private (sell side, buy side)
  • Public
emergence of e markets
Y Narahari, Computer Science and Automation, Indian Institute of ScienceEMERGENCE OF E-MARKETS
  • Alliance of IBM - i2 - Ariba
  • Alliance of GM - Ford - Chrysler
  • Alliance of mySAP- Commerce One - Oracle
  • chemdex, plasticsnet, e-steel, paperexchange, metalsite, capacityweb, mro, bandx, logisticsweb, etc.
  • In India: Indiamarkets.com, eBizchem.com, Autoexchanges
benefits to businesses
Y Narahari, Computer Science and Automation, Indian Institute of ScienceBENEFITS TO BUSINESSES
  • Extend the presence and reach of a company
  • Facilitate doing business with anyone, anytime, anywhere
  • Aggregation of content and facilitation of workflow lead to significant reduction in transaction costs
  • Cycle times are reduced and deliveries are quicker
  • Improves relationship with trading partners
  • market efficiencies
    • Better inventory management
    • Better visibility leading to predictability
benefits to buyers
Y Narahari, Computer Science and Automation, Indian Institute of ScienceBENEFITS TO BUYERS
  • Aggregation of multiple suppliers
  • Direct access to suppliers and through dynamic pricing
  • Location and tracking of new suppliers
  • Provides more negotiating power
  • Leads to quick response buyers
benefits to suppliers
Y Narahari, Computer Science and Automation, Indian Institute of ScienceBENEFITS TO SUPPLIERS
  • Provides reach to vast, untapped global markets
  • True value of products can be realized through aggregation and participation of buyers
  • Enables to support JIT practices
  • Leads to quick response suppliers
e markets design issues
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-MARKETS: DESIGN ISSUES
  • NEGOTIATIONS
    • Distributed Negotiations
    • Integrative Negotiations
    • Auctions
  • DESIGN OF USER INTERFACES
e markets design issues13
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-MARKETS: DESIGN ISSUES

ALGORITHMS

  • Buyer Aggregation
  • Supplier Aggregation
  • Demand Aggregation
  • Buyer-Seller Matching
  • Dynamic Pricing
  • Multi-Attribute Auctions
  • Combinatorial Auctions
example of a market algorithm
Y Narahari, Computer Science and Automation, Indian Institute of ScienceEXAMPLE OF A MARKET ALGORITHM
  • 3 BUYERS and 4 SUPPLIERS
    • Buyer X : (50 A, 10 B)
    • Buyer Y : (20 B, 30 C)
    • Buyer Z : (40 A, 20 C, 10 D)
  • BUNDLING
    • Bundle 1: (90 A) Negotiated contract
    • Bundle 2: (30 B, 50 C) Sealed bid auction
    • Bundle 3: (10 D) Dynamic auction
example of a market algorithm15
Y Narahari, Computer Science and Automation, Indian Institute of ScienceEXAMPLE OF A MARKET ALGORITHM
  • Sealed Bid Combinatorial Auction
    • Supplier P : (10 B, 10 C, p)
    • Supplier Q : (30 B, q)
    • Supplier R : (50 C, r)
    • Supplier S : (20 B, 50 C, s)
  • An optimization algorithm decides the best bids and handpicks the optimal subset of bids, based on cost, delivery times, etc.
e markets design issues16
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-MARKETS: DESIGN ISSUES
  • TECHNOLOGY
    • Authentication and security
    • Electronic payment
    • Software architecture
    • Distributed objects
    • Agents and mobility
    • Scalability
    • Interoperability
e markets design issues17
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-MARKETS: DESIGN ISSUES
  • INTEGRATION
    • with existing best practices
    • with existing business processes
    • with existing catalogs
    • with ERP software
    • with the backend
    • with other E-markets
e procurement
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-PROCUREMENT
  • All activities involved in obtaining materials and services and managing their inflow into an organization toward the enduser
  • Basic steps:
    • Information
    • Negotiation
    • Settlement
emergence of e procurement
Y Narahari, Computer Science and Automation, Indian Institute of ScienceEMERGENCE OF E-PROCUREMENT
  • Electronic catalogs
  • Internet search engines
  • Web-EDI
  • On-line auctions and bidding
  • Advances in E-commerce
best practice e procurement systems
Y Narahari, Computer Science and Automation, Indian Institute of ScienceBEST PRACTICE E-PROCUREMENT SYSTEMS
  • Dell online (Ariba Buyer)
  • Cisco
  • Enron corporation (mySAP and Commerce One)
  • Lockheed Martin (mySAP)
  • GE capital (i2 Buyside solution)
  • Defense Logistics Agency
  • Lawrence Livermore Laboratories
e procurement value additions
Y Narahari, Computer Science and Automation, Indian Institute of ScienceE-PROCUREMENT: VALUE ADDITIONS
  • Demand aggregation
  • Bundling and supplier aggregation
  • Optimal vendor selection
  • Innovative dynamic auctions
  • Multi-attribute decision support
conclusions
Y Narahari, Computer Science and Automation, Indian Institute of ScienceCONCLUSIONS
  • E-markets are key to faster and more efficient trade
  • E-markets have a positive influence all through the supply chain
  • There are challenging technical and technological issues in setting up and operating E-markets
  • E-procurement has emerged in a big way
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